11 July 2017
Reporter: Theo Andrew

Sanctuary Housing secures £75 million funding from bank and pension fund

Mitsubishi UFJ Financial Group (MUFG) and BAE Systems Pension Fund have agreed to provide a £75 million revolving credit facility to Sanctuary Housing Group.

MUFG will act as the lead arranger on the three-year facility, and after the three years, BAE Systems Pension Fund will provide a £75 million placement note at pre-agreed rates.

The arrangement will provide flexible funding for 30,000 homes over the next decade, in a deal that “could transform the funding landscape for social housing”, according to Sanjay Nabheram, MUFG’s director of housing finance in Europe, the Middle East and Africa.

In May, MUFG made a similar deal with Network Homes, funding social housing to the tune of £50 million.

This is the eleventh social housing transaction the group has completed this year, taking its commitments to the sector up to £705 million.

Tony King, group treasurer for Sanctuary Group, said: “The structure allows for the flexibility of a revolving credit facility from MUFG but with the certainty of long-term funding when it matures. Incorporating it within Sanctuary's existing group treasury structure makes it efficient in terms of our operations and security.”

Jon-Paul Phillips, portfolio manager at BAE Systems Pension Funds, said: “We are delighted to be entering into a long-term relationship with Sanctuary through this private placement transaction. It is very pleasing to agree a non-standard structure that suits Sanctuary's business plan, our long-term lending requirements as well as refinancing certainty for MUFG's facility.”

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